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Proposed Rhode Island Budget Excludes Self-Storage from Sales Tax

Self-storage operators in Rhode Island are breathing a sigh of relief this month after the 2013 state budget approved May 31 by the House Finance Committee excluded self-storage from a group of services originally proposed for an expansion of the state’s sales-tax base.

In his budget proposal for next year, Gov. Lincoln Chafee included moving, storage, warehousing and freight services as part of a previously exempt group of businesses he said would bring the state $16.6 million in added sales-tax revenue. The storage group of services, including “mini-warehouses” and self-storage units, was the only one of four groups removed from the $8.1 billion spending plan the finance committee forwarded to the state House of Representatives. The House could vote on the budget this week.

Members of the national Self-Storage Association (SSA) and the Rhode Island Self-Storage Association met with the House Finance Committee in recent weeks, arguing that applying sales tax to self-storage tenants would “burden low-income households and other vulnerable members of the community.” The SSA also questioned “the arbitrary nature of the ‘services’ tax on this real estate sector, but none other.”

Like many states, Rhode Island is facing severe budget shortfalls.

“In an era when we’ve often struggled to even maintain funding for many of our programs, we were able to get more money to schools sooner than expected, and also speed up money for distressed communities,” said Rep. Helio Melo, chairman of the House Finance Committee, in a released statement. “It’s also good for taxpayers because we were able to prevent several tax and fee increases.”